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The Specificity of General Human Capital: Evidence from College Major Choice

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Listed:
  • Ronni Pavan

    (University of Rochester)

  • Josh Kinsler

    (University of Rochester)

Abstract

In this paper we develop a model to estimate the return to college major and to understand why students appear to give up part of their earnings potential by selecting less profitable majors. Starting from the empirical evidence that individuals who work in a job related to their major field of study earn significantly higher wages than those working in jobs unrelated to their major, we build a model in which part of the human capital accumulated while in college is specific to their field of study. This specificity of human capital may introduce a sort of occupational risk if the potential human capital is not perfectly observed by the agent at the moment of major choice. After rejecting the hypothesis that agents have perfect knowledge over their potential future labor market abilities, we show that this type of occupational risk helps explain why relatively few students choose science related majors.

Suggested Citation

  • Ronni Pavan & Josh Kinsler, 2012. "The Specificity of General Human Capital: Evidence from College Major Choice," 2012 Meeting Papers 1036, Society for Economic Dynamics.
  • Handle: RePEc:red:sed012:1036
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    References listed on IDEAS

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    Cited by:

    1. Joseph G. Altonji & Lisa B. Kahn & Jamin D. Speer, 2016. "Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 361-401.
    2. Di Paolo, Antonio & Tansel, Aysit, 2017. "Analyzing Wage Differentials by Fields of Study: Evidence from Turkey," GLO Discussion Paper Series 91, Global Labor Organization (GLO).
    3. Hill, Andrew J., 2017. "State affirmative action bans and STEM degree completions," Economics of Education Review, Elsevier, vol. 57(C), pages 31-40.
    4. Rodney J. Andrews & Scott A. Imberman & Michael F. Lovenheim, 2017. "Risky Business? The Effect of Majoring in Business on Earnings and Educational Attainment," NBER Working Papers 23575, National Bureau of Economic Research, Inc.
    5. Nicolas Ziebarth & Martin Gervais, 2017. "Life after Debt: Post-Graduation Consequences of Federal Student Loans," 2017 Meeting Papers 238, Society for Economic Dynamics.
    6. Thomas Breda & Julien Grenet & Marion Monnet & Clémentine Van Effenterre, 2018. "Can female role models reduce the gender gap in science? Evidence from classroom interventions in French high schools," PSE Working Papers halshs-01713068, HAL.
    7. Bordon, Paola & Fu, Chao, 2015. "College-Major Choice to College-Then-Major Choice," MPRA Paper 79643, University Library of Munich, Germany.
    8. Tyler Ransom & Esteban Aucejo & Arnaud Maurel & Peter Arcidiacono, 2014. "College Attrition and the Dynamics of Information Revelation," 2014 Meeting Papers 529, Society for Economic Dynamics.
    9. Marta De Philippis, 2016. "STEM Graduates and Secondary School Curriculum: Does Early Exposure to Science Matter?," CEP Discussion Papers dp1443, Centre for Economic Performance, LSE.
    10. Ahmed S. Rahman, 2017. "Rise of the Machines Redux – Education, Technological Transition and Long-run Growth," Departmental Working Papers 61, United States Naval Academy Department of Economics.
    11. Arcidiacono, Peter & Aucejo, Esteban M. & Hotz, V. Joseph, 2016. "University differences in the graduation minorities in STEM fields: evidence from California," LSE Research Online Documents on Economics 64178, London School of Economics and Political Science, LSE Library.

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